Dutch reject next EU budget in early skirmish over bloc funding model
Minimalist
The European Commission’s proposal for the next EU budget is “dead on arrival,” Eelco Heinen, the Netherlands’ finance minister, tells Paola Tamma, as capitals begin a likely two-year period of haggling over the next shared pot.
Context: The commission in July proposed a €2tn budget for 2028-35, a large increase in absolute terms from the current €1.2tn, but — EU officials argue — a much smaller one when accounting for inflation. The current budget accounts for 1.13 per cent of the bloc’s national income; the proposal would amount to 1.26 per cent.
The Netherlands’ opening stance is hardline. Heinen argues that it would add around €5bn per year to what Dutch taxpayers give Brussels. “At a time where all our budgets are under pressure” from the need to boost defence spending, he said in an interview, “you cannot ask member states to spend more on the EU budget”.
That’s not at all a surprise: the Netherlands are a net contributor to the budget (they pay more into it than they get out) and a member of the “frugal four” club that for decades has sought to reduce EU spending.
“It’s a budget that looks to spend more while I think we should spend better,” said Heinen. For him, this means investing in “defence, innovation, migration” and finding savings elsewhere.
“Spending better” is exactly what the budget’s proponents say they are doing. They argue that the increased size is down to both the need to repay the joint debt raised to fund the EU’s recovery from the Covid-19 pandemic, and the creation of new instruments, such as a €409bn “competitiveness fund” that will target industrial priorities and — in theory — generate more in economic growth.
Capitals should ignore the numbers for now, the proposals’ backers argue, and instead focus on the budget’s overhauled structure, which slashes the number of spending programmes (many of which are overlapping and bureaucratic) from 52 to 16, and means roughly four times more of the expenditure can be reassigned during the seven-year period.
Denmark, which chairs the Council of EU member states until the end of the year, is focusing on finding broad agreement on the new structure before turning to the numbers.
But after that, the calculators will come out. Ultimately, convincing frugal countries — which include the Netherlands, Finland, Austria and Sweden, plus Germany — and fiscally constrained countries such as France will be the commission’s key task.
It will be a careful balancing act between requesting more resources and directing them to new priorities, while keeping everyone on board.
“There’s a focus on innovation and security, and I think those are exactly the two directions the EU should go,” Heinen said.